International Business : Global Markets and Economic Update
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MEXICAN STOCKS
Nervousness about the peso persists, although the currency strengthens some days. Overall, it has lost 7.7% of its value against the U.S. dollar this year, 1.13% in the past month. Interest rates rose to 18% in April, and the government has kept them high to protect the value of peso-denominated investments and attract foreign investors. Investor concern over the rejection by Zapatista rebels of the government peace proposal, and over a car bomb explosion in Guadalajara last weekend, could push rates higher.
The central bank has spent $11 billion in foreign currency reserves to buy pesos and protect the currency in recent months, a report from Weston Group says.
Source: Times Wire Services
SPOTLIGHT: ALGERIA
An austerity program designed to revitalize a stagnated economy has been paralyzed by social upheaval, including violent attacks by Muslim fundamentalists and the army takeover of the government. With unemployment at about 30%, the government has been reluctant to press changes that would create more hardship.
Sources: Bank of America; World Information Services
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